2014 (2) TMI 726 - HC - Customs

Smuggling of goods - Burden to prove smuggling - Retraction of statement - Tribunal shifted the onus of proof upon the Customs Department - Held that - Owner did submit before the Customs authorities that he had procured the seized gold from his customers at Raxaul. However, he failed to prove the statement. Section 123 of the Act, inter alia, provides that the burden of proof that the seized goods are not the smuggled goods lies on the person who claims to be the owner of the goods seized. Thus, the burden to prove that the seized gold was not smuggled lay upon the Owner. The Tribunal has erred in shifting the onus of proof upon the Customs Department. The Tribunal has also erred in holding that the statement given under Section 108 of the Act once retracted was not admissible in evidence, particularly because before the Carrier was produced before the Chief Judicial Magistrate he was in custody of the Customs officials for more than 24 hours. The Tribunal, however, has overlooked the fact that the Carrier, when produced before the Chief Judicial Magistrate on 24th April 1996, did not complain of atrocity, duress or coercion. Retraction was an afterthought. Had the Carrier given the statement under Section 108 of the Act under coercion he would have made complaint before the Chief Judicial Magistrate. Although, the Tribunal did find that there was some tampering of marks and numbers on the gold bars seized from the Carrier, the Tribunal erred in holding that mere tampering of marks and numbers did not prove that the gold bars were of foreign origin. The fact that there was tampering of the marks and numbers of the seized gold bars coupled with the fact that the Owner thereof could not disclose the source of acquisition should necessarily lead to an inference that the seized gold bars were of foreign origin, smuggled into the territory of India - Decided in favour of Revenue.

Summary

Issues:
1. Seizure of gold bars by Customs Officers.
2. Confiscation of seized gold.
3. Burden of proof on the owner of seized goods.
4. Validity of search and seizure by Superintendent of Customs.
5. Admissibility of retracted statement under Section 108 of the Act.
6. Determination of foreign origin of seized gold bars.

Analysis:
1. The judgment involves the seizure of three gold bars by Customs Officers from an individual in Bihar. The carrier admitted that the gold was given to him for delivery and was brought from Nepal after being dissolved to remove markings. The seized gold was held to be contraband and ordered to be confiscated.

2. The order of confiscation was challenged before the Tribunal, which later allowed the appeals on grounds of natural justice violation. The Commissioner of Customs (Appeals) upheld the confiscation, leading to further appeals by the owner and carrier. The Tribunal found the initial statement by the carrier to have no evidentiary value and criticized the Customs Department for not properly investigating the source of the gold.

3. The burden of proof was a key issue, with the appellant arguing that it lay on the owner of the seized goods as per Section 123 of the Act. The Tribunal was criticized for shifting this burden onto the Customs Department and for not considering the foreign origin of the gold bars.

4. The respondents argued against the validity of the search and seizure by the Superintendent of Customs, citing previous judgments. However, the court clarified that in matters of seized goods, the burden of proof lies on the owner, unlike in criminal cases where it rests on the prosecution.

5. The court found that the retracted statement under Section 108 of the Act was admissible as the carrier did not complain of coercion before the Chief Judicial Magistrate. The retraction was considered an afterthought, and tampering with the gold bars' marks and numbers indicated foreign origin.

6. Ultimately, the Appeals were allowed, quashing the Tribunal's judgment and restoring the Commissioner of Customs (Appeals) order. The court emphasized the burden of proof on the owner, the admissibility of the carrier's statement, and the inference of foreign origin based on tampering and lack of disclosure of the gold's source.